Stackelberg competition

About: Stackelberg competition is a(n) research topic. Over the lifetime, 6611 publication(s) have been published within this topic receiving 109213 citation(s).

Closed-Loop Supply Chain Models with Product Remanufacturing

Abstract: The importance of remanufacturing used products into new ones has been widely recognized in the literature and in practice. In this paper, we address the problem of choosing the appropriate reverse channel structure for the collection of used products from customers. Specifically, we consider a manufacturer who has three options for collecting such products: (1) she can collect them herself directly from the customers, (2) she can provide suitable incentives to an existing retailer (who already has a distribution channel) to induce the collection, or (3) she can subcontract the collection activity to a third party. Based on our observations in the industry, we model the three options described above as decentralized decision-making systems with the manufacturer being the Stackelberg leader. When considering decentralized channels, we find that ceteris paribus, the agent, who is closer to the customer (i.e., the retailer), is the most effective undertaker of product collection activity for the manufacturer. In addition, we show that simple coordination mechanisms can be designed such that the collection effort of the retailer and the supply chain profits are attained at the same level as in a centrally coordinated system.

Crowdsourcing to smartphones: incentive mechanism design for mobile phone sensing

Abstract: Mobile phone sensing is a new paradigm which takes advantage of the pervasive smartphones to collect and analyze data beyond the scale of what was previously possible. In a mobile phone sensing system, the platform recruits smartphone users to provide sensing service. Existing mobile phone sensing applications and systems lack good incentive mechanisms that can attract more user participation. To address this issue, we design incentive mechanisms for mobile phone sensing. We consider two system models: the platform-centric model where the platform provides a reward shared by participating users, and the user-centric model where users have more control over the payment they will receive. For the platform-centric model, we design an incentive mechanism using a Stackelberg game, where the platform is the leader while the users are the followers. We show how to compute the unique Stackelberg Equilibrium, at which the utility of the platform is maximized, and none of the users can improve its utility by unilaterally deviating from its current strategy. For the user-centric model, we design an auction-based incentive mechanism, which is computationally efficient, individually rational, profitable, and truthful. Through extensive simulations, we evaluate the performance and validate the theoretical properties of our incentive mechanisms.

Price Competition in a Channel Structure with a Common Retailer

Abstract: In recent studies of channel competition, it has been found that channel intermediaries reduce the intensity of direct competition between manufacturers. The underlying channel structure in most studies consists of two manufacturers and two retailers each of whom sells only one manufacturer's product exclusively. This paper adds to this growing literature of channel competition by analyzing a channel structure with two competing manufacturers and one intermediary a common retailer that sells both manufacturers' products. Unlike some exclusive dealers or retail outlets of a manufacturer, however, a common retailer is often a powerful player in the market. This paper studies three noncooperative games of different power structures between the two manufacturers and the retailer, i.e., two Stackelberg and one Nash games. It is shown that some of the results depend critically on the form of the demand function. With a linear demand function, a manufacturer is better off by maintaining exclusive dealers while a retailer has an incentive to deal with several producers. All channel members as well as consumers are better off when no one dominates the market. The common retailer benefits more than the manufacturers do from a symmetric decrease in the manufacturing cost. As products are less differentiated, all channel members' prices and profits increase: a counterintuitive result. When the demand function is nonlinear, however, an exclusive dealer channel provides higher profits to all than a common retailer channel given a power structure. As products are more differentiated, a manufacturer's profit decreases when a common retailer is used, but increases when an exclusive dealer is used. These results underscore the importance of choosing a correct demand function for a channel decision.

A complete solution to a class of principal-agent problems with an application to the control of a self-managed firm

Abstract: This paper considers a class of principal-agent problems which have the following features. (1) There is adverse selection because the principal ignores the value of one parameter of the agent’s true characteristics. (2) Leaving aside the information parameter, the principal’s welfare as well as the agent’s welfare depend on two types of variables, observable to both of them. The first ones, possibly multidimensional, are called action variable(s), and the second one, which is one-dimensional, has in general the meaning of a money transfer. (3) The principal is a Stackelberg leader of the two-person game. He can commit himself to decision rules which are admissible on informational grounds. He optimizes within the adequate class, taking into account, besides the agent’s reaction, one constraint which has generally the meaning of an individual rationality constraint and sometimes of a feasibility constraint. The optimization is limited to the class of non-stochastic mechanisms. (4) The problem can also receive an alternative interpretation: the principal faces a continuum of agents of unknown characteristics (the distribution being known, however). Stylized principal agent problems of this type have often been considered in the economic literature. In particular, the reader will later be able to recognize that the standard income tax model a la Mirrlees (1971), the quality (or quantity) choice model of the monopolist a la Mussa and Rosen (1978) [or Maskin and Riley (1982)], and the model of government regulation of the private monopolist of Baron and Myerson (1982) all belong to

Fees Versus Royalties and the Private Value of a Patent

Abstract: We compare how much profit an owner of a patented cost-reducing invention can realize by licensing it to an oligopolistic industry producing a homogeneous product, by means of a fixed fee or a per unit royalty. Our analysis is conducted in terms of a noncooperative game involving n + 1 players: the inventor and the n firms. In this game the inventor acts as a Stackelberg leader, and it has a unique subgame perfect equilibrium in pure strategies. It is shown that licensing by means of a fixed fee is superior to licensing by means of a royalty for both the inventor and consumers. Only a "drastic" innovation is licensed to a single producer.